China FDI Remains Strong

Foreign direct investment (FDI) in China rose 2.2 percent on the year in March, while outbound flows posted a milder rise, as foreign corporate investors remain undeterred by weakening domestic economic performance.  That brings inbound FDI up 11.3 percent to $34.88 billion for the first quarter.

The data follows a series of disappointing data releases , highlighting flagging domestic fixed asset investment, including in property, and slowing industrial activity.  Foreign investment projects take time to conceive and implement, making FDI a lagging indicator of general confidence, but they have remained strong in recent months nevertheless.

Exceptionally strong growth in FDI inflows in the first two months of the year, including a nearly 874-percent jump for Saudi Arabia and a 367-percent gain for France, were due to one-off deals, commerce ministry spokesman Shen Danyang said in March.  In contrast, March trade data released on Monday was extremely weak, with exports falling 15 percent on the year, the worst performance for March since 2009, in the depths of the financial crisis.